Hubs operator Victory Offices slips into the redVictory Offices' Barangaroo hub in Sydney.

Hubs operator Victory Offices slips into the red

Struggling co-working hub operator Victory Offices has gone heavily into the red for its June quarter, despite closing several facilities in an effort to staunch its losses.

The ASX-listed operator posted a net cash outflow of $1.3 million from its operating activities over the quarter, after taking in $3.3 million of receipts from customers.

It said that operating cash outflows totalled $4.6 million, covering staffing, marketing, administration and corporate costs, costs related to leased assets, and the notional interest paid component of lease payments required under accounting rules. As well, $41,000 was paid in directors’ fees.

Victory’s stock fell 11.1 per cent, or 0.2¢, to 1.6¢ on Monday after its June quarter result was lodged after the market closed on Friday. The operator hit the bourse three years ago at $2 a share. Since then, Victory has battled through misfortune, after rolling lockdowns undermined its business model. Midway through last year, it was locked out of three of its facilities in disputes over unpaid rent, and more hubs have closed since then.

In May, former Victorian premier Steve Bracks, who helped steer Victory’s public listing, resigned as chairman and non-executive director; this month, founder and chief executive Dan Baxter put his uncompleted seven-bedroom Toorak mansion up for sale, seeking more than $15 million.

Despite the latest setback, Mr Baxter remains relatively sanguine on the future of co-working at Victory, and the company has flagged “a gradual improvement in business and steady incremental growth in occupancy rates across its properties” over the June quarter.

“However, COVID-19 challenges remain for the company such as the recent new wave of COVID-19 which may result in declining levels of return to work for many organisations than previously anticipated,” it said.

“The company remains confident that flexible workspaces are important to the way the world does business going forward and will recover in parallel with the Australian economy.”

Trouble on another front emerged last month, with Victory announcing it would fight a wind-up order from the landlord of its former premises at 180 St Kilda Road, Zig Inge Group, over a statutory demand to pay $1 million of rent owing.

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